Saudi's $200bn solar park to include largest utility-scale battery ever made

Project is 100 times larger than any other proposed in the world
By Bloomberg
Thu 29 Mar 2018 08:37 AM

The world’s biggest-ever solar project - a $200 billion venture in Saudi Arabia - comes with a “batteries included” sticker that signals a major shift for the industry.

SoftBank Group partnered with the oil-rich Saudis this week to plan massive networks of photovoltaic panels across the sun-drenched desert kingdom.

The project is 100 times larger than any other proposed in the world, and features plans to store electricity for use when the sun isn’t shining with the biggest utility-scale battery ever made.

The daytime-only nature of solar power has limited its growth globally partly because the cost of batteries was so high. Utilities that get electricity from big solar farms still rely on natural gas-fired backup generators to keep the lights on around the clock.

But surging battery supplies to feed electric-car demand have sent prices plunging, and solar developers from California to China are adding storage to projects like never before.

“The future is pretty much hybrid facilities,’’ said Martin Hermann, the CEO of 8minutenergy Renewables, a US company that’s expecting to include batteries in the vast majority of the 7.5 gigawatts of solar projects it’s developing.

Affordable batteries have long been the Holy Grail for solar developers. Without them, some of the best US solar markets, like California, have too much of electricity available at midday and not enough around dusk when demand tends to peak.

Wind wins

While the solar industry has grown, it still accounts for less than 2 percent of US electricity supply and has been outpaced by investments in other green technologies.

Wind farms are set to overtake hydroelectric plants next year as the biggest source of renewable energy in the US, accounting for more than 6 percent of the nation’s electricity generating capacity, government data show.

Now, the economics of storage is shifting. The price of lithium-ion battery packs tumbled 24 percent last year, according to Bloomberg New Energy Finance, and the US is allowing solar-dedicated storage to qualify for a federal tax credit. More utilities and local energy providers are mandating that new solar farms include batteries to store power.

Adding batteries to solar plants could revolutionize the industry. California has contemplated going all-renewable by 2045. It won’t be able to do that without storage, said Kevin Smith, chief executive officer of SolarReserve, a solar project developer that uses molten-salt energy-storage technology.

More control

“Storage just adds control,” said Logan Goldie-Scot, a San Francisco-based energy storage analyst at BNEF. “In a number of markets, you are seeing customers seeking a greater deal of control.”

By the end of 2018, it’s possible that US utilities may be asking for batteries on every solar project proposed, said Ravi Manghani, an energy analyst at GTM Research. That would mean the country is about to embark on a major battery boom.

Only about 1 gigawatt of storage had been installed in the US through the third quarter, according to BNEF.

Several large developers already are proposing storage units as part of their projects, including NextEra Energy Inc.

Cypress Creek Renewables, which builds clean-power plants, is contemplating batteries at every one of its early-stage solar projects, according to CEO Matthew McGovern. The company installed batteries at 12 solar farms last year.

The shift isn’t just in the US

The Saudi-SoftBank project calls for an astonishing 200 gigawatts of generating capacity that would be built over the next decade or so, with the first electricity being produced by the middle of next year. Based on BNEF data, the project would dwarf the total solar panels that the entire photovoltaic industry supplied worldwide last year.

‘Evening Power’

A key feature of the project will be the construction of “the largest utility-scale battery” in two to three years that will supply “evening hour” power to consumers, Masayoshi Son, SoftBank’s founder, told reporters in New York this week.

Tesla, the Palo Alto, California-based carmaker that’s building batteries with Panasonic at a giant factory in Nevada, will supply the storage units for a solar project in the Australian state of Victoria. Houston-based Sunnova Energy is selling solar and battery systems in Puerto Rico, where Hurricane Maria devastated the island’s power grid in September and tens of thousands of people still don’t have electricity.

Cheaper batteries are even providing a boost in the residential market for solar systems.

“It’s a game-changer,” said Ed Fenster, executive chairman of San Francisco-based Sunrun, the largest US installer of residential solar systems. “The demand that we’re seeing is outstripping our expectations.”

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